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Editorial
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Title: The showdown on tax cuts for the rich
Source: [None]
URL Source: [None]
Published: Dec 1, 2010
Author: http://www.salon.com/news/taxes/index.ht
Post Date: 2010-12-01 07:32:56 by tom007
Keywords: None
Views: 127
Comments: 11

Editor: Updated: Today Topic: Taxes Tuesday, Nov 30, 2010 16:48 ET The showdown on tax cuts for the rich This is the first test of the president's resolve with the new Congress -- and he should be tough as nails By Robert Reich

*

The showdown on tax cuts for the rich Reuters/Jason Reed President Obama speaks to the press after meeting with bipartisan congressional leadership at the White House on Tuesday.

This originally appeared at Robert Reich's blog

The President met with Republican leaders at the White House this morning to talk about whether the Bush tax cuts should be extended to top taxpayers, as Republicans want.

No decision has been reached, but this is the first test of the President’s resolve with the new Congress -- and he should be tough as nails. The economics and politics both dictate it.

Taxpayers in the top 1 percent don’t need it (they are now getting almost a quarter of all national income, the highest percent since 1928).

They don’t deserve it (they got the lion’s share of the benefits of the 2001 and 2003 Bush tax cuts, and have had no reason to expect a continuation of their windfall).

They won’t spend it to stimulate the economy (top earners save a much higher proportion of their income than the middle class).

And giving it to them blows a giant hole in the budget (the Joint Tax Committee estimates the cost of extending the Bush tax cuts for the top 1 percent to be $61 billion in 2011 alone.)

In political terms, a strong stand enables the President to clearly demonstrate who’s side he’s on (the working and middle class that’s still bearing the brunt of this lousy economy) and who’s side the Republicans are on (the powerful and privileged who brought much of this on, and who are now doing just fine).

The only compromise he should be prepared to make is to extend the Bush tax cuts to the bottom 99 percent (rather than the bottom 98 percent), and for two years rather than ten. The top 1 percent begins at around $500,000 rather than $250,000.

This would allow the President to even more sharply illustrate the extraordinary concentration of income at the top, while robbing Republicans of their debating point about small business (just about all small business owners with payrolls earn under $500,000).

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#1. To: tom007 (#0)

Robert Reich nor President Obama inspire any confidence.

In Arizona they may cut corporate & business taxes as well as subsidize business

In Arizona there are 200 people waiting for transplants whose funding for those transplants was cut by the state. One of them died in the last week. But we have money to lower taxes for business, and if you read the article I linked to, we have money to subsidize them. The idea they have is that if we subsidize business, then we'll have more jobs. Unfortunately, that is not logical because there is little propensity to invest in our economy. Investments are made in places like China. With an over-valued US dollar and open trading with countries who suppress their currencies to ours', investments will not be made here, but will be made elsewhere. Supply-side tweaking does not change that fundamental fact.

After the American civil war our government put up a wall of protectionism with high tariffs. The europeans followed and we were isolated in trade. By 1900 we were the most powerful economy in the world. This would not have happened without the protectionism. From 1981 to 1984 the US dollar fell by 40% to a basket of currencies. During that time we also enacted legislation that told foreign manufacturers that they must either produce here or else not sell here. In 1984 our economy boomed at 7.2% growth on average for the whole year. this was the highest in US history. This would not have happened without the protectionist policies that Reagan directed and the Democrats even accepted in those days.

At the end of WW2 the US government had massive debts, actually as a percent of our gdp, higher than the figure we call our national debt today. The national debt figure we quote today for some reason does not include the $20 trillion in bailouts done by the government that included massive borrowing by the government to finance. There is no public explanation as to why this is. However, if you accept the lower figure of about $14 trillion as our cumulative federal government debt, then as a percent of our gdp it is lower than in 1945. After WW2 our government focused on paying down that debt, and taxed rich people very heavily to do it. The top marginal tax rate in those days for rich people was 94%.

I realize that those who rule us would like us to think that national suicide is a good thing. Unfortunately, many Americans go along with this mentality subliminally sold to them in the mass media and the education system. But if we cared about our nation, ourselves and our families' futures, then we should understand that this propensity to make taxes for rich people very low at this time is suicidal for our nation.

The poorest people in America do not get government aid. they are homeless and can barely work at all in our economy. They must compete against foreigners who our government allows to work in our economy. They are threatened with guest workers whom the republicans say they will bring us. Some of them work for temp agencies that take half the money paid by the clients for their labor. After this little bit of the money paid by the client for their labor is passed onto them the government itself takes 15.8% of their pay from each paycheck including both employee and employer contributions to the payroll tax. This money is never returned to these people either in tax refunds or in social security money. As these people die before they are able to collect social security. The money is simply taken from them even though they have nothing.

The richest people in America pay a 15.0% tax on investment income. We're voluntarily surrendering hundreds of billions of dollars a year in tax revenues by the tax cuts of 2003. And there are hypocritical people in our country, especially in Washington, who say they are concerned about the spending deficits, yet they want to preserve these insane tax cuts for rich people.

You can't close the spending deficit on the backs of the poor. Because the spending on the poor is just not large enough. Technically, we could eliminate social security spending and medicare spending completely and this would eliminate the spending deficit of the government. It would also kill millions of Americans. Is this really what we want to do?

If you include the department of defense budget, the supplemental war funding bills, the veterans benefits, the military pensions and the debt service costs made necessary by military spending, then this is 53% of our entire federal budget. And also remember we have high spending on law enforcement that amounts to police state functions, such as the TSA fiasco. There are 18 federal law enforcement agencies, each get a huge stream of money, much of which is ridiculous. They all have their own private armies who behave in a fascist way.

The only way we'll really balance the budget it to dramatically pull back our military missions and even our police state. However, restoring sanity on taxes would help.

Warren Buffet wrote an article once highlighting that his taxes on his income amounted to 17% of his income. He has some regular income taxed around 35%. and mostly investment income taxed at 15%. He said his secretary's tax rate on her income comes out to over 30%. He wrote another article and said that class warfare was occurring in America and that the rich people were winning that war.

When we as a people follow along with our leaders and enable this class warfare against the poor of our country, then we are traitors to our own nation's cause. The only way we can balance the budget and create general prosperity is to restore traditional American priorities by staying away from foreign wars and by producing our own goods and services at home.

We engage in the current trade regime because it is profitable for big companies. But it is not profitable for our nation, and we are fools to put up with it. I'm not against trade, but it must be profitable for our nation for us to engage in it.

China exports to us 4.5 times what we export to them. We pay for these imports not with our own exports, but with borrowing. We're not trading with China in reality. They're merely exporting to us and building up their domestic economy while we reap financial ruin in our domestic situation. Our leaders tell us this is what we should do. We're fools to follow them.

Red Jones  posted on  2010-12-01   8:46:07 ET  Reply   Untrace   Trace   Private Reply  

In Arizona there are 200 people waiting for transplants whose funding for those transplants was cut by the state.

Rojo

Where does it say in the Constitution that the state has to pay for transplants?

The richest people in America pay a 15.0% tax on investment income

NO!, stop lying. Anybody that owns stocks that pay dividens pay 15% on the dividend income. Why don't you buy some stocks that pay a dividend and stop whining about "rich" people? And while you're at it, define "rich"

Flintlock  posted on  2010-12-01   9:06:21 ET  Reply   Untrace   Trace   Private Reply  

Where does it say in the Constitution that the state has to pay for transplants?

I don't know. You tell me. Where does it say?

I never said that it did.

I like the Articles of Confederation better than the US Constitution. The US Constitution has not worked out for us. It has resulted in a federal government that is a horrible tyrant. The Articles of Confederation would have protected us from that.

You may not be aware of this, but the US Constitution deals with the federal government. and your question deals with state government.

Red Jones  posted on  2010-12-01   9:15:05 ET  Reply   Untrace   Trace   Private Reply  

but the US Constitution

Rojo

Don't try to change the subject comrade. Explain why the State of AZ has a responsibility to pay for organ transplants...and define "rich"

Flintlock  posted on  2010-12-01   9:22:24 ET  Reply   Untrace   Trace   Private Reply  

#6. To: Flintlock (#5)

Don't try to change the subject comrade.

you raised the US Constitution as an issue. I did not.

As for your other question, I am sorry, but I not willing to participate in a dysfunctional discussion.

I guess you win the argument. I surrender.

Red Jones  posted on  2010-12-01 09:34:15 ET  Reply   Untrace   Trace   Private Reply  

Explain why the State of AZ has a responsibility to pay for organ transplants...and define "rich"

That's right, if parents don't have $650,000 to pay for their daughter to get a transplant, then she should do the right thing and die, preferably sooner.

Hopefully on a sidewalk, like I have seen in Guatemala.

It really makes for a better society.

tom007  posted on  2010-12-01 10:16:36 ET  Reply   Untrace   Trace   Private Reply  

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